Business intelligence (BI) is an umbrella term that includes a variety of IT applications that are used to

analyze an organization’s data and communicate the information to relevant users. Its major
components are data warehousing, data mining, querying, and reporting.

BI Tools BI includes a variety of software tools and techniques to provide the managers with the
information and insights needed to run the business. Information can be provided about the current
state of affairs with the capability to drill down into details, and also insights about emerging patterns
which lead to projections into the future. BI tools include data warehousing, online analytical
processing, social media analytics, reporting, dashboards, querying, and data mining. BI tools can range
from very simple tools that could be considered end-user tools, to very sophisticated tools that offer a
very broad and complex set of functionality. Thus, Even executives can be their own BI experts, or they
can rely on BI specialists to set up the BI mechanisms for them. Thus, large organizations invest in
expensive sophisticated BI solutions that provide good information in real time. A spreadsheet tool, such
as Microsoft Excel, can act as an easy but effective BI tool by itself. Data can be downloaded and stored
in the spreadsheet, then analyzed to produce insights, then presented in the form of graphs and tables.
This system offers limited automation using macros and other features. The analytical features include
basic statistical and financial functions. Pivot tables help do sophisticated what-if analysis. Add-on
modules can be installed to enable moderately sophisticated statistical analysis. A dashboarding system,
such as Tableau, can offer a sophisticated set of tools for gathering, analyzing, and presenting data. At
the user end, modular dashboards can be designed and redesigned easily with a graphical user interface.
The back-end data analytical capabilities include many statistical functions. The dashboards are linked to
data warehouses at the back end to ensure that the tables and graphs and other elements of the
dashboard are updated in real time (Figure 2.2). Data mining systems, such as IBM SPSS Modeler, are
industrial strength systems that provide capabilities to apply a wide range of analytical models on large
data sets. Open source systems, such as Weka, are popular platforms designed to help mine large
amounts of data to discover patterns.

BI Skills As data grows and exceeds our capacity to make sense of it, the tools need to evolve, and so
should the imagination of the BI specialist. “Data Scientist” has been called as the hottest job of this
decade. A skilled and experienced BI specialist should be open enough to go outside the box, open the
aperture and see a wider perspective that includes more dimensions and variables, in order to find
important patterns and insights. The problem needs to be looked at from a wider perspective to
consider many more angles that may not be immediately obvious. An imaginative solution should be
proposed for the problem so that interesting and useful results can emerge. A good data mining project
begins with an interesting problem to solve. Selecting the right data mining problem is an important
skill. The problem should be valuable enough that solving it would be worth the time and expense. It
takes a lot of time and energy to gather, organize, cleanse, and prepare the data for mining and other
analysis. The data miner needs to persist with the exploration of patterns in the data. The skill level has
to be deep enough to engage with the data and make it yield new useful insights. BI Applications BI tools
are required in almost all industries and functions. The nature of the information and the speed of
action may be different across businesses, but every manager today needs access to BI tools to have up-
to date metrics about business performance. Businesses need to embed new insights into their
operating processes to ensure that their activities continue to evolve with more efficient practices. The
following are some areas of applications of BI and data mining. Customer Relationship Management A
business exists to serve a customer. A happy customer becomes a repeat customer. A business should
understand the needs and sentiments of the customer, sell more of its offerings to the existing
customers, and also, expand the pool of customers it serves. BI applications can impact many aspects of
marketing 1. Maximize the return on marketing campaigns: Understanding the customer’s pain points
from data-based analysis can ensure that the marketing messages are fine-tuned to better resonate
with customers. 2. Improve customer retention (churn analysis): It is more difficult and expensive to win
new customers than it is to retain existing customers. Scoring each customer on their likelihood to quit
can help the business design effective interventions, such as discounts or free services, to retain
profitable customers in a cost-effective manner. 3. Maximize customer value (cross-selling, upselling):
Every contact with the customer should be seen as an opportunity to gauge their current needs.
Offering a customer new products and solutions based on those imputed needs can help increase
revenue per customer. Even a customer complaint can be seen as an opportunity to wow the customer.
Using the knowledge of the customer’s history and value, the business can choose to sell a premium
service to the customer. 4. Identify and delight highly valued customers: By segmenting the customers,
the best customers can be identified. They can be proactively contacted, and delighted, with greater
attention and better service. Loyalty programs can be managed more effectively. 5. Manage brand
image: A business can create a listening post to listen to social media chatter about itself. It can then do
sentiment analysis of the text to understand the nature of comments and respond appropriately to the
prospects and customers. Health Care and Wellness Health care is one of the biggest sectors in
advanced economies. Evidence-based medicine is the newest trend in data-based health care
management. BI applications can help apply the most effective diagnoses and prescriptions for various
ailments. They can also help manage public health issues, and reduce waste and fraud. 1. Diagnose
disease in patients: Diagnosing the cause of a medical condition is the critical first step in a medical
engagement. Accurately diagnosing cases of cancer or diabetes can be a matter of life and death for the
patient. In addition to the patient’s own current situation, many 28 BUSINESS INTELLIGENCE AND DATA
MINING other factors can be considered, including the patient’s health history, medication history,
family’s history, and other environmental factors. This makes diagnosis as much of an art form as it is
science. Systems, such as IBM Watson, absorb all the medical research to date and make probabilistic
diagnoses in the form of a decision tree, along with a full explanation for their recommendations. These
systems take away most of the guess work done by doctors in diagnosing ailments. 2. Treatment
effectiveness: The prescription of medication and treatment is also a difficult choice out of so many
possibilities. For example, there are more than 100 medications for hypertension (high blood pressure)
alone. There are also interactions in terms of which drugs work well with others and which drugs do not.
Decision trees can help doctors learn about and prescribe more effective treatments. Thus, the patients
could recover their health faster with a lower risk of complications and cost. 3. Wellness management:
This includes keeping track of patient health records, analyzing customer health trends, and proactively
advising them to take any needed precautions. 4. Manage fraud and abuse: Some medical practitioners
have unfortunately been found to conduct unnecessary tests and/or overbill the government and health
insurance companies. Exception-reporting systems can identify such providers, and action can be taken
against them. 5. Public health management: The management of public health is one of the important
responsibilities of any government. By using effective forecasting tools and techniques, governments
can better predict the onset of disease in certain areas in real time. They can thus be better prepared to
fight the diseases. Google has been known to predict the movement of certain diseases by tracking the
search terms (like flu, vaccine) used in different parts of the world. Education As higher education
becomes more expensive and competitive, it is a great user of data-based decision-making. There is a
strong need for efficiency, increasing revenue, and improving the quality of student experience at all
levels of education.

1. Student enrolment (recruitment and retention): Marketing to new potential students requires schools
to develop profiles of the students that are most likely to attend. Schools can develop models of what
kinds of students are attracted to the school, and then reach out to those students. The students at risk
of not returning can be flagged, and corrective measures can be taken in time. 2. Course offerings:
Schools can use the class enrolment data to develop models of which new courses are likely to be more
popular with students. This can help increase class size, reduce costs, and improve student satisfaction.
3. Alumni pledges: Schools can develop predictive models of which alumni are most likely to pledge
financial support to the school. Schools can create a profile for alumni more likely to pledge donations
to the school. This could lead to a reduction in the cost of mailings and other forms of outreach to
alumni.